Arun Jaitley Current Affairs

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16th meeting of FSDC held in New Delhi

The 16th meeting of the Financial Stability and Development Council (FSDC) was held in New Delhi. It was chaired by Union Finance Minister Arun Jaitley. 

It was attended by heads of all financial sector regulators as its members. It reviewed the major issues and challenges facing the economy.

Key Highlights of the meeting 
  • Indian Economy: India appears to be much better placed because of improvement in its macroeconomic fundamental despite fragile world economy. It reviewed the major issues and challenges facing the economy.
  • Banking: The status of NPAs of public sector banks and measures taken by the government and the RBI for tackling the stressed assets were reviewed. It also discussed about further action to be taken in this regard.
  • Financial inclusion/ financial literacy: Discussed about the various initiatives taken by the government and regulators for promoting financial inclusion/ literacy. It also discussed further measures for promoting the same.
  • Technology: Discussed issues pertaining to Fintech, digital innovations and cyber security. It also discussed on further steps to be taken.
  • Demonetisation: It will help in eliminating the shadow economy and tax evasion. It will have a positive impact on GDP and fiscal consolidation in the long run.

Besides, a brief report on the activities undertaken by the FSDC sub-committee chaired by RBI Governor Urjit Patel was placed before the FSDC meeting.

About Financial Stability and Development Council

  • The Central Government had established Financial Stability and Development Council (FSDC) in December 2010 with the Finance Minister as it Chairman.
  • The idea to create it was first mooted by the Raghuram Rajan Committee on Financial Sector Reforms in 2008.
  • It is a super regulatory body for regulating financial sector which is a vital for bringing healthy and efficient financial system in the economy.
  • The FSDC envisages to strengthen and institutionalise mechanism of (i) maintaining financial stability, (ii) Financial sector development, (iii) inter-regulatory coordination along with monitoring macro-prudential regulation of economy.
Composition of FSDC
  • Chairman: Union Finance Minister.
  • Members: Heads of the financial sector regulatory authorities (i.e, RBI, SEBI, IRDA, PFRDA), Finance Secretary and/or Secretary, Department of Economic Affairs (Union Finance Ministry), Secretary, Department of Financial Services, and Chief Economic Adviser.
  • FSDC can invite experts to its meeting if required.
Two Core functions
  • Act as an apex level forum to strengthen and institutionalize the mechanism for maintaining financial stability.
  • Enhance inter-regulatory coordination and promoting financial sector development in the country.

Other functions

  • Focus on financial literacy and financial inclusion.
  • Monitor macro-prudential supervision of the economy.
  • Assess the functioning of the large financial conglomerates.

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GST Council approves Draft Central, State GST laws

The Goods and Services Tax (GST) Council has approved the draft Central GST (CGST) and State GST (SGST) laws along with Compensation Bill to bring the GST into implementation, country’s biggest indirect tax reform.

The CGST and SGST laws contains total of 197 provisions and five schedules. They were approved at the seventh GST Council meeting presided by Union Finance Minister Arun Jaitley in New Delhi.

GST Council agreed upon

The draft CGST and SGST laws do not include division of administrative turf between states and the centre. The gst-coucil-meetingCompensation Bill will have 2015-16 as base year and compensation to States for the loss of revenue from the GST rollout will be paid every two months. It provides legal backing to the centre’s promise to compensate states if their revenue growth rate were to fall below 14% in the first five years of GST. However few issues were left to be settled, such as source of compensation fund.

Next meeting

The next meeting of the Council scheduled early January 2017 will try to resolve the issue of dividing the administrative powers between the Centre and states. It will also take up the Integrated GST (IGST) Bill. It will also discuss the most contentious issue of ‘dual control’ or ‘cross empowerment’.

About GST Council

  • As per Article 279A of the Constitution, GST Council is joint forum of the Centre and the States.
  • Composition: Union Finance Minister (Chairperson), Union Minister of State (MoS) in-charge of Revenue of finance (Member) and Minister In-charge of taxation or finance or any other Minister nominated by each State Government (Members).
  • Functions: They are mention in Article 279A (4) of the Constitution. It will make recommendations on important issues related to GST, like (i) Goods and services that may be subjected or exempted from GST. (ii) Model GST Laws.  (iii) Principles that govern Place of Supply, threshold limits, GST rates. (iv) GST rates will including the floor rates with bands and (v) Special rates for raising additional resources during natural disasters/ calamities, special provisions for certain States, etc.

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GoM recommends heavy fine and ban on celebrities endorsing products in misleading ads

A high-level Group of Ministers (GoM) has approved imposing a heavy fine and ban on celebrities who endorse products making unrealistic and dodgy claims.

The GoM headed by Union Finance Minister was tasked to look into the issue of Celebrity endrosement and recommendations of Standing Committee of the Parliament on the recently introduced The Consumer Protection Bill, 2015.

GoM recommendations

  • First time offender celebrities should be fined Rs 10 lakh and banned for one year.
  • Second and subsequent offenders should be fined Rs 50 lakh and banned for up to 3 year.
  • Dropped Standing committee’s proposal of jail term to celebrities found guilty for misleading endorsement.

Background

  • The Union Government had introduced The Consumer Protection Bill, 2015 in Parliament to replace the Consumer Protection Act, 1986 to deal with consumer protection and safety.
  • The bill proposes tough measures for the protection of consumer rights and providing strict punishment to violators.
  • After its introduction it was referred to a Standing Committee, which gave a report suggesting measures like making celebrities accountable for the brands they endorse.
  • It also had called for severe penalties such as jail term for celebrities endorsing brands, publishers/broadcasters of misleading advertisements and manufacturers of such products.

Recommendations of Standing Committee

  • For the first-time offence, offender celebrities should be penalised with either a fine of Rs 10 lakh or imprisonment up to two years or both.
  • For second-time offences, offender celebrities should be penalised with either Rs 50 lakh or imprisonment of five years or both.

What is the issue related to celebrity endorsement?

The issue of accountability of celebrities as brand endorsers was in spotlight after the ban on Nestle India Ltd’s Maggi Noodles over inadequate safety standards and high levels of lead and Monosodium glutamate (MSG). The ban was subsequently lifted. Besides this, some other celebrities, too had faced public ire for endorsing brands that did not meet expectations.

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